First Thing Today (VIP) -- August 20, 2013

PROFIT-TAKING PRESSURES GRAINS & SOY... As of 6:30 a.m. CT, corn futures are down 3 to 5 cents amid light profit-taking, while soybeans are seeing losses of 7 to 14 cents through the March contract. SRW wheat futures are around 4 to 5 cents lower with HRW wheat seeing lighter losses. HRS wheat is steady to marginally higher. The U.S. dollar index and crude oil futures are under pressure.

DAY 1 CROP TOUR RESULTS... The first day of the Pro Farmer Midwest Crop Tour revealed a corn yield in Ohio of 171.64 bu. per acre, which compares to 110.5 bu. per acre last year and a three-year average of 144.12 bu. per acre. Ohio soybean pod counts in a 3'x3' square totaled 1,283.61, which compares to last year and a three-year average of 1,162.64. The western leg of the Tour found a South Dakota corn yield of 161.75 bu. per acre, which compares to 74.26 bu. per acre last year and a three-year average of 119.65 bu. per acre. South Dakota soybean pod counts in a 3'x3' square totaled 1,016.68, which compares to 584.93 last year and a three-year average of 984.62.

On Day 2 of the Tour, scouts on the eastern leg will travel from Fishers, Indiana to Bloomington, Illinois. Scouts on the western leg of the Tour will sample fields on their way from Grand Island, Nebraska to Nebraska City, Nebraska. We will post preliminary route reports in "Evening Report," and official crop tour results for Indiana and Nebraska will be posted on your website tonight.

CORN & SOYBEAN CCI RATINGS FALL... When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the corn crop declined 5 points from week-ago to 361, while the soybean crop fell 3 points to 359 over the past week as increasing dryness across the Midwest took a toll on the crop. The corn condition rating declined in Illinois, Indiana, Iowa, Minnesota, South Dakota and Ohio, while Nebraska held steady. Soybeans were a similar story as declines in Illinois, Indiana, Iowa, Minnesota, Missouri and the Dakotas more than outweighed slight upticks in Ohio and Nebraska.

CANADA, MEXICO SEEK COMPLIANCE PANEL ON U.S. IMPLEMENTATION OF COOL... Canadian and Mexican officials have requested that the World Trade Organization (WTO) establish a compliance panel to challenge the modifications the U.S. made to country-of-origin labeling (COOL) rules, which they say fail to comply with a previous WTO ruling in the bilateral dispute. Canada's International Trade Minister Ed Fast and Agriculture Minister Gerry Ritz said in a joint statement on Aug. 19 that their government has formally requested the compliance panel, contending that the U.S. failed to implement a WTO dispute panel's findings on COOL rules for live cattle and hogs and that it continues to maintain unfair trade practices that are severely damaging the Canadian industry. Canadian and Mexican officials contend that recent modifications to the COOL rules did not bring them into compliance with the WTO mandate. The Canadian government is still reviewing its options for potential retaliation targets if authorized by the WTO, with the comment period for this matter ending Sept. 30. The government had identified in June 2013 a list of 37 tariff items as potential targets, including live cattle and hogs and meats produced from them. A Mexican official signaled that his country could announce retaliation measure even before a WTO ruling on the matter. A coalition of U.S., Canadian and Mexican producers recently filed a motion seeking a preliminary injunction to prevent implementation of the COOL labeling regime pending resolution of the lawsuit.

CASH HOG INDEX LIMITS SELLING INTEREST... Building supplies weighed on the cash and futures market for much of the day yesterday, but the lean hog market posted a late rebound for a mixed finish, with nearbys favoring the downside and deferred months the upside. A rebound in corn prices lifted deferred hog contracts as this could cause producers to harness any expansion plans. A lack of heavy pressure on nearby contracts signals traders are hesitant to push futures sharply lower with the CME lean hog index at more than a $15 premium to the October contract. The pork cutout value slid $1.92 Monday on light movement of 252 loads.

HIGHER BEEF PRICES SLOW MOVEMENT... Late week cash cattle trade is again likely as packers have not yet placed bids and interest is said to be limited. The market believes live cattle have put in a bottom and will continue to rise seasonally through fall after back-to-back weeks of higher cash cattle trade. Showlist estimates are down this week, reflecting ongoing supply tightening. But for cash market strength to continue, the boxed beef market must also improve. Action to start the week was far from impressive. Choice cuts firmed 83 cents, but Select fell 24 cents and movement slowed to a very light 110 loads. Slower movement raises concerns about consumer demand.